Spectranetics first-quarter revenue up 6% to $29.0 million

Apr 29 2010

Spectranetics Corporation (Nasdaq: SPNC) today reported financial results for the quarter ended March 31, 2010.

Revenue for the first quarter of 2010 was $29.0 million, up 6% compared with revenue of $27.3 million for the first quarter of 2009. The pre-tax loss for the first quarter of 2010 was $924,000, a significant reduction from a $2,889,000 pre-tax loss during the first quarter of 2009.

"We completed the successful initial launch of the Turbo-Tandem in the latter half of the first quarter, achieving over $1.0 million in sales. As a result, our peripheral atherectomy business grew 14% sequentially and 6% year-over-year. I am also pleased with the continued growth of our Lead Management business which increased 21% year-over-year," said Emile J. Geisenheimer, Chairman, President and Chief Executive Officer. "We are now starting to see the benefits of our expense management activities, which are reflected in the significant reduction in our pre-tax loss as compared with last year's first quarter. Continued discipline in the area of expense management combined with ongoing revenue growth is a key focus as we strive to achieve our stated goal of profitability for the full year 2010."

The pre-tax loss during the first quarter of 2010 includes $353,000 of legal and other costs related to the federal investigation. The pre-tax loss during the first quarter of 2009 included $1,373,000 of costs associated with the federal investigation. Excluding these special items in both periods, the adjusted pre-tax loss was $571,000 in the first quarter of 2010, compared with an adjusted pre-tax loss of $1,526,000 in the first quarter of 2009. A further description of these special items and a reconciliation of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP are provided immediately following the financial tables under Reconciliation of Non-GAAP Financial Measures.

First Quarter Revenue Review

Vascular Intervention revenue rose 1% to $15.5 million, Lead Management revenue increased 21% to $9.9 million, laser equipment revenue declined 9% to $1.3 million, and service and other revenue declined 5% to $2.3 million, all compared with the first quarter of 2009. Vascular Intervention sales include three product lines — atherectomy (including peripheral and coronary), which increased 2%, crossing solutions, which decreased 1%, and thrombectomy, which increased 7%, all compared with the first quarter of 2009.

On a geographic basis, revenue in the United States was $24.9 million in the first quarter of 2010, an increase of 6% from the prior year first quarter. International revenue totaled $4.1 million, an increase of 10% from the first quarter of 2009.

Cash, cash equivalents and current investment securities totaled $21.1 million at March 31, 2010, compared with $19.1 million at December 31, 2009. In addition, the Company holds $6.9 million of auction-rate securities at March 31, 2010, a decrease from $9.8 million at December 31, 2009 due primarily to the sale of one of the auction rate security positions during the first quarter of 2010. These securities are included as investment securities - non-current on our balance sheet.

2010 Outlook

The Company reiterates its outlook for 2010 full year performance, which is described below.

The Company continues to expect revenue growth during 2010 in both the Vascular Intervention and Lead Management business units and expects higher growth rates internationally than in the United States.

Excluding any impact of the Turbo-Tandem product launch, the Vascular Intervention revenue growth rate is anticipated to be in the low to mid-single digits during 2010 as compared with 2009. Including the impact of the Turbo-Tandem product launch, the Vascular Intervention revenue growth rate is anticipated to be in the high single digits to low-teens. The Lead Management revenue growth rate in 2010 as compared with 2009 is anticipated to be in the mid-teens.

Laser equipment revenue and service and other revenue are expected to grow in the low to mid-single digits during 2010 as compared with 2009.

Gross margin is expected to be in the range of 71% to 72% for the year ended December 31, 2010.

Management expects a pre-tax profit for the year ended December 31, 2010.

SOURCE Spectranetics